NEW YORK (TheStreet) -- For the week ended Aug. 26, the S&P 500 Insurance Index gained 2.9%, while the KBW Insurance Index was up 3.4%. In comparison, the broader S&P 500 Index rose 4.7%. Meanwhile, at close yesterday, the S&P 500 Insurance Index ended 4.8% higher, while KBW Insurance Index moved up 5.7%. The S&P 500 rose 2.8%.
Insurance stocks are on a relief rally as estimates that show Hurricane Irene's cost to insurers was less than expected. Catastrophe modelers expected insurers to pay almost $14 billion towards Irene's damages. However, a ballpark estimate is loss of only $2.6 billion. Industry analysts say that insurers have not been able to raise rates during the past three years amid strong competition and readily available supply. Now, even a small storm could be the catalyst to trigger across-the-board premium increases. Analysts believe that this latest storm could lead to significant firming in the insurance industry, after years of weakness.
These eight insurance stocks are adequately capitalized with more than $1.4 billion. Based on the hurricane damage, latest quarterly results and analysts' buy and hold ratings for attractive future returns, these stocks have potential upsides ranging from 7% to 25%. On average, analysts' surveyed by Bloomberg have buy recommendation of 56% and hold rating of 35% for these stocks.
We have listed these stocks in ascending order of upside implied by average analyst price target.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV